If you receive errors when attempting to view this white paper, please install the latest version of
"The term "managed hosting" describes the provision of a ready to use
IT stack including hardware and infrastructure software for the deployment of applications."
Source : Quocirca Ltd
Managed Hosting in Europe: A Review of the Managed Hosting Market and Suppliers in Europe
is also known as :
Managed Hosting Bundle
Managed Hosting Cloud
Managed Hosting Colocation
Managed Hosting Companies
Managed Hosting Company
Managed Hosting Comparison
Managed Hosting Costs
Managed Hosting Definition,
Managed Hosting Pricing,
Managed Hosting Providers,
Managed Hosting Reviews,
Managed Hosting Service,
Managed Hosting Solutions,
Managed Server Host,
Managed Server Hosting,
Managed Services Hosting,
Managed Shared Hosting,
Managed Virtual Server Hosting,
Managed Web Site Hosting,
Managed Website Hosting,
Managed Application Hosting,
Managed Data Hosting,
Managed Dedicated Host,
Best Managed Hosting,
Business Managed Hosting,
Center Managed Hosting,
Cheap Managed Hosting,
Class Managed Hosting,
Complex Managed Hosting,
Datapipe Managed Hosting,
Dedicated Managed Web Hosting,
Enterprise Managed Hosting,
Fully Managed Hosting,
Rails Managed Hosting,
Redplaid Managed Hosting,
Secure Managed Hosting,
Semi Managed Hosting,
Top Managed Hosting,
Flexible Managed Hosting.
The term “managed hosting” describes the provision of a ready to
use IT stack including hardware and infrastructure software for the
deployment of applications. Providers house the infrastructure in central
data centres accessed by customers over the internet. In the past this has
usually been on the basis of hardware servers dedicated to individual
customers, however the increasing use of virtualisation has allowed managed
hosting providers to reduce costs by sharing infrastructure between
customers, creating the earliest versions of what the industry now refers to
as compute clouds. Computing platforms provisioned and managed by specialists
provide higher service levels, greater ease of secure access and more
manageable costs than many organisations are able to achieve internally.
Managed hosting in Europe
A review of the managed hosting market and
suppliers in Europe
The managed hosting market in Europe is thriving despite
the current economic conditions. This report looks at the reasons why, what
buyers should look for and who the main providers are.
- Managed hosting is attractive to organisations of all sizes as it allows them to
acquire IT infrastructure at a controlled cost, whilst reducing risk and
adding value to their broader business community
Even during economic hard
times, managed hosting providers are seeing growth as businesses can deploy
new applications on infrastructure paid for out of operational expenditure. The
service levels offered are often better than those provided by internal IT
departments and applications are easily shared with customers, partners and
- Quocirca recognises four types of managed hosting provider (MHP)
First there are the pure plays for whom managed hosting is their primary
business, second are the major system integrators that offer managed hosting
as part of a broader service delivery, third are ISPs and network service
providers that provide managed hosting as a value add to their networking
services and finally there are the cloud platform providers that have emerged
out of the software as a service market.
- MHPs vary in how they target
markets and how they sell their services
Some MHPs focus mainly on the
enterprise, others more on small and medium sized business, whilst a few
specialise in working with independent software vendors. Their market focus will
control how they take their service to market and this report helps identify
the right provider to approach for a given size or type of end user
- Charging models vary but are always based around a
Historically for one-to-one infrastructure provision, charging
has been based on a fixed cost per allocated resource, but with the
increasing use of shared infrastructure there is a direct link between the
customer and physical resource and has lead to more flexible charging models
such as per transaction, per volume of data or per user/month.
managed hosting providers adhere to the best practice standards for data
security and IT management
ISO27001 and related standards outline best
practice for data security and is widely adopted by managed hosting
providers, as is ITIL® for good practice in IT infrastructure management.
Suppliers can also help their customers with specific needs: for example
meeting the requirements of the payment card industry for handling credit
- The hardware used by MHPs is largely irrelevant to end user
organisations and the software infrastructure provided is driven by customer
demand, which is mainly for Microsoft Windows and Linux About 60% of demand
is for Windows and 30% for Linux. The increasing use of virtualisation allows
the separation of hardware and infrastructure software and the sharing of
resource, dramatically reducing costs. VMware is the most widely use
virtualisation platform, even by providers that focus on Microsoft.
All businesses have a core focus and for managed hosting providers
that is the provision and management of top quality IT infrastructure
services. Businesses that recognise the benefits of a highly available and
secure computing platform should consider turning to experts for the
provision of this, freeing their organisation to focus on its own core
1 Introduction—from mainframe
bureaux to cloud computing
This paper reports on the state of the managed
hosting market in Europe in 2009.
“Hosting” is a widely used term in the IT
industry; the addition of the verb “managed” narrows it to include those
hosted services that are managed for the subscriber by the provider. So managed
hosting does not include pure colocation services, where just data centre space
is provided. Neither is it taken to include hosted business applications such as
email and CRM (so called software as a service, SaaS).
categorise such things is always problematic as there is much overlap. Many
managed hosting providers (MHPs) buy data centre space from co-location
providers and have SaaS providers as customers. Perhaps the best way to think
of a managed hosting service is the provision of a ready to go managed computing
stack including server, storage and networking hardware plus infrastructure
software on which customer applications are deployed. Driven by customer
demand, the software component of that stack is most commonly based on Microsoft
Windows or Linux, increasingly virtualised using VMware.
There is nothing
new about managed hosting; it is almost as old as the IT industry itself. Back
in the 1960s it was possible to buy-in compute power from mainframe service
bureau and, for some, this is still a lucrative business. There have long
been service providers that will take over existing hardware and software
infrastructure and manage it, sometimes literally putting it in a van and
moving it to the hoster’s premises. In the last decade, however, a new sort
of managed hosting has emerged based on cheap commodity hardware.
Initially this was mostly one-to-one hosting, where each customer had their
own assigned hardware servers and benefited from sharing the cost of just
data centre and network infrastructure with others. However, the concept of
sharing has gone a stage further in the last few years with the widespread
adoption of virtualisation, allowing the one-to-many sharing of server and
storage hardware enabling providers to achieve ever greater economies of scale.
The culmination of this process has led to the emergence of so called cloud
Whilst this report focuses on traditional managed
hosting and not cloud platform providers, it is the view of some in
industry—including Quocirca—that a managed hosting service based on shared
infrastructure and a cloud platform amount to much the same thing and, at the
very least, both aim to provide computing resources to similar types of
customers. Although it should be noted that MHPs largely focus on the provision
of Windows and Linux infrastructure, some cloud platforms are highly
proprietary. This version of Quocirca’s managed hosting report covers cloud
computing platforms in section 4.1.
2 Report background
describes the benefits of managed hosting and details the services of some of
the major providers. The market is huge, so it limits itself mainly to those
that provide their services across Europe. This may or may not mean
infrastructure in multiple countries as some, for example Rackspace, sells
managed hosting service across Europe using infrastructure based in just one
country (UK); others, such as NTT Europe Online, have facilities across Europe.
In some cases local infrastructure can be an advantage for performance reasons
(see section 5) but there are other benefits such as better access to
language skills for support and the ability to offer contracts under local law.
Some smaller, local MHPs are referred to where an aspect of their service is
of particular interest.
The report does not claim to be 100% inclusive,
because there are so many providers, but Quocirca believes most of the major
suppliers that fit the definition “pan-European managed hosting provider” are
included; apologies upfront for any omissions.
With any such report there
will be those reading it with an interest in managed hosting who will want to
report such errors and omissions for a planned future version of the report—Quocirca
is happy to receive such feedback via the following email address
The level of detail provided to
Quocirca for this report varied from one MHP to another. Quocirca sent a
detailed questionnaire to all the companies that are featured. Some
enthusiastically returned it within days, some chose not complete it for
non-disclosure or other reasons. Tables and charts are dispersed throughout the
report to show how different provider’s offerings vary; where detail was not
available this is indicated.
This is a free report in line with Quocirca’s
business model. Upfront sponsorship for the report was provided by NTT Europe
Online and Quocirca is grateful for its support. NTT Europe Online has a vested
interest as it is a provider of managed hosting services. However, the report
is intended to be impartial and Quocirca believes the reader will find this
to be the case, although the case studies included are all provided by the
3 Why managed hosting?
IT infrastructure has become more and more
of a commoditised utility and, generally speaking, businesses don’t run
utilities, they buy them in. Furthermore, for most organisations, the
availability of IT infrastructure is business critical; it takes specialists
to make sure utilities are constantly available and performing well.
the mid-1990s the provision of managed hosting, in the form of mainframe bureaux,
was restricted to large enterprises. One reason for this was the cost of
leasing a network connection to such services. The availability to all of a
cheap to use, standardised, ubiquitous network from the mid 1990s onwards (the
internet) meant it was possible to open up managed hosting services to all.
Whilst many enterprises make extensive use of managed hosting services it has
also been a boon for smaller organisations, especially those where internet
delivery has become critical to their business. These fall into two
- Small and medium sized business (SMBs) that have limited
in-house IT skills
- Independent software vendors that are moving to a
software as a service (SaaS) based delivery model
The benefits of managed
hosting for any organisation are best described in terms of improved cost
management, business risk reduction and added business value.
Generally speaking, managed hosting offerings are paid for through
a subscription (see section 4.3), which is hard to compare directly with the
alternative of buying and managing all the components in-house. The fact that
such subscriptions are paid for out of operating expenditure (opex), rather
than capital expenditure (capex), appeals to many businesses, especially when
on-going finances are unpredictable. Using a managed hosting platform will
almost certainly lead to a lower cost of ownership, due to the economies of
scale achieved through sharing infrastructure from servers to data centre
Furthermore, because MHPs pay close attention to cost it is in their
interest to manage software licences carefully; an MHP will not pay for more
software licences than it needs. They also benefit from special licencing
arrangements with software vendors that are not available to end users, such
as Microsoft SPLAs (service provider licence agreement). So economies of
scale apply just as much to software as to hardware.
Ensuring IT systems are kept running is a specialist task. For sure, a server
can be expected to run for months or years without trouble, but when it does
go wrong, fixing it or replacing it quickly is essential. Add in all the
other links in the chain—storage hardware, network routers, firewalls
etc.—and regular problems with availability are inevitable. Keeping
infrastructure running, ensuring there is built-in redundancy and spare parts
available, is the job of MHPs, who do it all based in purpose-built,
enterprise-class data centres. IT failure is a risk most do not want to
contemplate; MHPs can reduce the risk of it happening, committing to service
levels that internal IT departments would not.
Another area where risk
becomes easier to manage relates to escrow agreements. Such agreements ensure
the availability of software code should the provider cease trading. Using
software deployed on MHP infrastructure means that the ownership of the software
can change, without any disruption of service. If the software was deployed
on the software provider’s own infrastructure it is possible that the
hardware assets involved could be sold by receivers and that would mean the end
user having to redeploy the given software following a possible disruption of
service of indeterminate length.
4.3 Charging models
Charging models for hosted services vary, but they are all based on a subscription of some sort.
The more control the service provider has over the infrastructure being managed, the more likely they
are to use virtual parameters such as compute power used, number of virtual servers invoked or more
business-orientated metrics such as per user or per transaction charges. When the customer specifies
the hardware, charging tends to be based on material parameters such as allocated floor space, number
of rack units, power use and items of hardware under control.
With a standard commoditised stack the service provider understands what it takes to power it, maintain it
and ensure high levels of availability better than when they are managing bespoke equipment. This then allows
them to bring charges in-line with a customer's own business model; so, for example, an ISV providing a hosted
email service may want charging based on the number of active mail boxes whilst a ticketing agency may want
transaction-based pricing based on tickets issued.
Those MHPs that have a focus on the ISV market will usually be flexible enough to provide charging models
that reflect those of the ISV itself.
There are a number of standards that pertain to good data centre management and data security.
Some will matter more than others depending on the deployment being planned. Table 2 shows the standards
complied with by individual MHPs.
Compliance with ISO 27001 shows the MHP follows generally accepted good practice to ensure the confidentiality,
integrity and availability of data. The standard is widely adhered to by MHPs, but check for full certification,
which means compliance is externally audited every 6 months.
Information Technology Infrastructure Library outlines the practices that are the most beneficial to delivery
of IT services; v3 is the latest version and many organisations are in transition.
Control Objectives for Information and related Technology is a set of best practices for IT set out by
ISACA (Information Systems Audit and Control Association).
Statement on Auditing Standard 70 is targeted at those who provide outsourced services, such as MHPs.
It examines how they process transactions and how they are audited.
Payment Card Industry Data Security Standard: MHPs do not comply directly with PCI standards, but they can
help their customers to. The standard which details how payment card information should be handled requires
certain levels of physical and virtual security.
A project management method defined by the UK's Office of Government Commerce (OGC) for
UK government projects
4.5 Service level agreements (SLA)
Any contract made with an MHP should address service levels and define what the penalties are for failing to
meet them. It has already been pointed out in section 3 that one of the benefits of working with an MHP should
be a better SLA than might be expected from an internal IT function but also that failure to meet the defined
SLA has consequences.
A key metric in a SLA is system availability, or "up-time", as a percent of total time.
Typically MHP SLAs provide upwards of 99.95%, but remember there is a big difference between 0.05%
outage which is almost 450 hours a year and 0.005% outage which is less than 45 hours a year.
To provide visibility into the systems, most MHPs provide some level of access to systems data relevant
to an individual customer, but the ease of access to such information and the tools provided will vary.
Generally, access is provided via a web-based customer portal. Some, such as Global Crossing and NTT Europe
Online, see the access tools they provide as being a key differentiator.
The reason that MHPs offer such high service levels is because their business would fail if they did not.
Their organisations and business processes are based around keeping IT going 24 hours a day, 7 days a week, 52
weeks a year. To achieve this, MHPs have to have built-in redundancy at all levels. This includes hardware,
network access, power supply and the data centre itself (see section 5).
For one-to-one hosting, redundancy is relatively expensive; it might require a complete replicate system on hot
standby so as soon as a problem occurs all users and transactions can be switched over whilst the failed system is
fixed. MHPs will charge a premium for this.
With shared infrastructure, redundancy is built-in and automatic and consequently much cheaper. It is incumbent
on the MHP itself to have a fully redundant infrastructure. The infrastructure will not be reliant on a single item
of hardware: should a server or router fail, it can be replaced whilst the rest of the system keeps running. A
storage failure of some sort may lead to some disruption whilst data is recovered, unless mirrored data sets
are in use (for which some MSPs will charge a premium). Most MHPs will have at least one secondary data centre facility.
4.7 Application testing
Obviously, before an application can be deployed it needs to be developed and tested. Most organisations
maintain an internal development platform, but will still need to test applications on an MHP's infrastructure
before deployment; this includes post deployment updates. With one-to-one hosting, recreating the deployment
environment is expensive but with shared infrastructure it is easy and cheap and an isolated virtual environment
can be provisioned using the same underlying infrastructure that will be used for deployment.
End user case study—Boursorama
Boursorama is one of Europe's leading online
share trading brokers and, in 2006, became an online bank too. It is active in France, Germany, Spain and the
Boursorama.com brings together financial information from many sources to provide a single point of access
for a range of services producing over 3 million unique visitors a month. A disruption in Bousorama's online service
would mean a complete loss of contact with its customers and cause serious reputational damage. It needs a guaranteed
SLA with high uptime commitments.
To achieve this, Boursorama initially worked with a US provider, but wanted to
bring its operations close to home to improve performance times, which are critical for financial transactions.
after an evaluation of European MHPs, Boursorama turned to NTT Europe Online's French operation which offered the best
value whilst meeting the required SLAs, could perform the migration and provide full redundancy with failover to NTT's
London data centre.
5 MHP infrastructure
This section looks at the infrastructure choices made by MHPs and options that they offer to their customers.
MHP hardware preferences
For the purchaser of managed hosting services hardware is pretty much irrelevant; it does not matter providing
the service works reliably. However, for the MHP itself, having good relationships with selected hardware providers
are important to ensure favourable pricing and good service levels, so they work with selected suppliers from a
For the hardware vendors themselves, these relationships are critical, as managed hosting changes the whole
dynamic around how businesses pay for server MIPs, gigabytes of storage and network bandwidth.
This is especially true in the SMB market; consider the sale of an accounting application. In the past each
SMB would buy an accounting system and choose a hardware server to deploy it on—so the hardware vendors had many
opportunities to sell their equipment providing they had the right channels. However, if the same accounting
application is now sold as service deployed on hosted infrastructure, the hardware decision is made just once,
by the MHP—in fact, it was probably made long before the decision to deploy the accounting application service.
In this way the hardware requirements of many businesses are aggregated up in a single enterprise size chunk. For
the hardware vendors the stakes are high but for the end user there is no longer the distraction of a utility purchase,
they can focus at a higher level in the IT stack where the value add to their business is more obvious—software, which
is covered in the next section.
Nearly all hosting services are based on commodity x86-based hardware. HP is the most widely used, followed by IBM
and Sun. Dell and Fujitsu are less favoured although, unsurprisingly, as an MHP Fujitsu mainly uses its own hardware.
It will be interesting to see how Cisco fares as it enters the server market with its unified computing initiative as
it already has a relationship with most MHPs for the provision of networking kit. Some still offer services around
other proprietary hardware, for example IBM mainframes, but this is generally a bespoke one-to-one service and is
not about sharing infrastructure. Fujitsu has a legacy MVE mainframe business from its acquisition of ICL in 2000.
For storage, NetApp is the most widely used, followed by EMC, amongst those that reported to Quocirca; IBM and HP
are generally rated as secondary vendors. Some turn to more specialist vendors such as 3 Par and Pillar; interestingly,
3 Par, a specialist provider of high end storage systems, has placed a long term bet on the ascendancy of managed hosting
as the main way in which IT infrastructure will be provided to SMBs in the long term.
For networking the use of Cisco is pretty much ubiquitous, with Juniper being used in places and some other vendors
favoured as secondary suppliers.
The mix of software provided by MHPs reflects customer demand more than their own preferences. Whether it is an
ISV deploying a SaaS offering or an end user deploying their own application, there will be a preferred software
environment for doing so. That said, currently two main software infrastructure stacks prevail in the IT industry
for application deployment; Microsoft Windows/.NET and Linux/Java.
ISV case study—2e Systems 2e Systems is an ISV serving four major airlines in
Germany, where it is based. It provides services for flight bookings, check-in, frequent-flyer programmes and mobile
notification—all considered critical for the on-going efficient operation of an airline.
2e Systems wanted to bring
all its applications together to offer them as a single service and, to achieve the highest possible service levels for
its customers, it sought a managed hosting partner.
Eventually 2e Systems selected NTT Europe Online because it was
the most cost effective, could provide the required service levels and a charging system that reflected the business
model of airlines; for example, a cost per booking for ticket sales.
The applications are hosted at NTT's Frankfurt
data centre, which appealed to 2e Systems as it allowed the teams from both companies to get to know each other as they
worked together to roll out the new services.
Where MHPs provide figures around usage, Windows prevails by a ratio of around 2:1, although some, for example
7global, specialise in only providing Microsoft. The Linux distribution most widely used is Red Hat, with some
Debian and SUSE. Most also support UNIX where required (Sun Solaris, HP UX and IBM AIX), and this makes up around
10% of business; some reporting a decline, others slow growth compared to its two bigger competitors, to which
UNIX-based applications are often being migrated.
One thing that is clear from all MHPs is the rising use of virtualisation. NTT Europe Online reports that 70%
of quotes now require a virtualised environment and it is a necessity for sharing infrastructure. One platform
stands out above all others—VMware—with XEN and Microsoft Hypervisor being used to a lesser extent. Virtualisation
not only makes the sharing of infrastructure easier, but means changing requirements can be more easily taken into
account. Those MHPs that predicted future requirements expect demand for Microsoft-based infrastructure to outstrip
that for Linux.
At the application sever level, .NET and J2EE are supported in line with operating system requirements.
The J2EE installed base is split between IBM WebSphere, Oracle (including the Oracle Application Server and
BEA WebLogic) and, to a lesser extent, open source products like JBoss and Tom Cat.
Finally, it should be pointed out that some MHPs specialise in the direct support of certain business
applications like SAP, Oracle Applications or Microsoft Exchange, SharePoint and Dynamics. This should not
be confused with ISVs who use MHP infrastructure to provide their own applications as a service.
Data centre location
Does a data centre location matter? To an extent yes, but it is more about the resources available at a
given location than the location per se. Many MHP customers will see little need to visit its premises, except
maybe during the selection phase. For some time-critical applications, such as share trading where split second
timing can make a difference, it is seen as preferable for it to be physically close to a data centre, hence the
proliferation of them in London. However, this can lead to its own problems, especially regarding power supply.
Power has rapidly become the limiting factor for selecting locations for new data centres, and one way to get
around this is to head for areas where there is excess supply; for example South Wales in the UK, where manufacturing
has declined, leading to excess capacity. Choosing such locations has the additional benefit of abundant cheap labour,
albeit with a certain amount of retraining required. There has been a trend by some to move to be near renewable power
sources, but as wind and fast flowing water tend to be in remote areas there is a danger that any environmental benefits
are off-set by some MHP employees, who actually need to work at the data centre site, having to travel further to get to
Another consideration is network bandwidth. MHPs need direct access to the high bandwidth internet backbone
to ensure high performance, often seeking to have two providers available to provide redundancy. This is a major
consideration for any MHP building its own data centre, but for those that work with co-location providers, such
considerations will already have been taken in to account. MHPs that are also carriers, such as BT and Cable &
Wireless will, for obvious reasons, provide primary internet access via their own networks.
Table 3 shows the European countries where the MHPs covered in this report have data centres. As mentioned in
section 2, in-country presence can be an advantage for local language and legal support.
Many MHPs are consolidating data centres; for example, IBM has reduced its number of data centres worldwide
from around 100 to about 30. It might be useful to show total data centre floor space under management or a measure
of available spare data centre capacity, but few MHPs make such figures public, and if you are entering a contract to
use shared infrastructure, then available space is irrelevant as you want it to be filled with state of the art hardware
ready and waiting to run your applications.
End user case study—UEFA
The managing body for European football, UEFA,
provides a streaming video service for all its matches to 35 broadcasters for viewers of matches in 120
To produce consistent high quality output UEFA required a reliable platform, a high performance
network and efficient content distribution capability. In addition it has to protect digital broadcast rights
across international boundaries.
Rather than trying to achieve this itself, in 2003 UEFA turned to NTT Europe
Online, which has enabled it to provide a consistent high quality service for the last 6 years.
For many organisations the fact that data is stored outside of their own physical premises when working
with MHPs raises concerns, but providing due diligence has been done in selecting a provider this concern
is misplaced, especially if they are complying with relevant standards such as ISO 27001. In fact the reverse
is true; working with an MHP should provide enhanced levels of security simply because the infrastructure it
is stored on is housed in a secure enterprise-class facility and that those managing it have lot at stake if
security is breached.
All MHPs provide fundamental IT security, including encryption, secure remote access, malware detection,
firewalls and so on, but the level of service offered and the types of products used will vary and in some
cases there may be additional charges for enhanced security.
Physical security is also an issue and gaining access to the physical infrastructure of an MHP will be
harder than it is to breach the premises of many SMBs.
Power supply and environment considerations
For MHPs, considerations around power supply are fundamental and when a new data centre facility is built
or colocation provider selected, these data centres require a continuous and stable power supply. Most rely on
taking utility supply from the grid but have an emergency backup capability in place should the grid supply fail.
This usually consists of a huge array of batteries to keep things running for a few minutes whilst backup generators
are started up, usually powered by fuel oil stored on site for such emergencies.
As with the use of IT anywhere, MHPs are making more and more effort to make their use of power more efficient.
Hardware and software innovation helps with this and it is in the interest of MHPs to be using leading edge products
in this regard. Particularly for one-to-one hosting, MHPs sometimes base their charging on power usage (see section 4.3).
MHPs can drive environment messages around their efficient use of power; however some take it a stage further
by seeking to use only sustainable power supplies either purchased over the grid, or by locating near green power
generation facilities, such as eLINIA, which derives power from waste, and Centrinet that makes use of local windmills.
As has been said earlier, a remote location for a data centre near a green power source is all well and good, providing
all the saved omissions are not cancelled out by employees that have to work on site commuting long distances.
Claims to be carbon neutral should be examined closely; for example some environmental claims are founded on
carbon off-setting (planting trees etc. in lieu of energy use), which is considered insubstantial by many
Finally, check the state of a given MHP's finances. In the dot-com crash at the turn of the 21st century
many MHPs went out of business or were acquired. The market is more mature now and the suppliers covered in
this report are all substantial organisations so this is less of an issue, but should still be a consideration.
Whether your organisation is a large enterprise, an SMB or an ISV, there will be benefits to be found in
working with MHPs for sourcing part if not all of your IT infrastructure requirements. Finding the right MHP
will take a degree of due diligence. The partnership that is formed needs to be long lasting, as changing your
MHP is possible but undesirable.
There is plenty of choice in Europe from the managed hosting specialists to the systems integrators, ISP and
network infrastructure providers that provide managed hosting as an add-on service. Those already working with
MHPs recognise the benefits through better cost management, improved customer service and more reliable service
provision. Few organisations revert to in-house management once a partnership with an MHP has been formed
7 MHP summary descriptions
Quocirca has defined four types of MHP in section 4.1 of this report. Entries for vendors for three of these
types are listed here by category. A final section lists what Quocirca has termed "ones to watch", which
includes smaller providers which cannot be considered pan-European or those who have short term plans to set up in
7.1 Type 1—pure play MHPs
A pure play MHP has operations and a sales process that is geared for all sizes of business and can scale
up their services for customers as they grow. For a managed hosting service provider to say it serves the SMB
market must mean that it has the sales process in place to deal with such business.
7.1.1 NTT Europe Online
As its name would suggest, NTT Europe Online (NTT) is the European online services subsidiary of the Japanese
communications giant NTT. NTT Europe Online was formed in 2006, 6 years after NTT acquired Verio, a managed hosting
service provider with active operations across Europe. NTT has expanded the original service and now has data centres
in Germany, France, UK, Spain and Switzerland, giving it local language and contractual support in all the major
NTT targets both the enterprise and SMB markets with a range of services, including the straight provision of
hosted infrastructure and other services such as application management, video archiving, threat management and
virtualisation services. NTT also works with ISVs and is a delivery partner for IBM, Microsoft, Sun and Oracle.
Managed hosting, provided using a shared infrastructure, constitutes 90% of NTT's business and it has been
growing at about 40% per year. It sees cloud computing, and in particular private clouds, as a natural extension
of this. 50% of its infrastructure is Microsoft Windows based and 45% Linux, the remainder being UNIX.
NTT is ISO27001 certified and is seeking PCI certification. Its engineers are trained to ITIL® v2/v3 level.
It has various pricing models based on per transaction, per volume of data processed, per unit of processing time
used etc. depending on requirement. NTT sees cloud services as an important next step in its evolution and will
be launching new services in 2009 with a focus on security and reliability.
7.1.2 Rackspace Hosting
Headquartered in the UK, Rackspace Hosting Europe provides managed hosting, email hosting and cloud services
across Europe, Middle East and Africa. In 2008, Rackspace opened a new 4,600 square meter data centre in Slough
(UK) to supplement its facilities elsewhere in the UK, USA and Hong Kong. All of its data centres are SAS 70 compliant.
Traditionally Rackspace Hosting has provided dedicated servers to enterprises, SMBs and ISVs, offering platforms based
on Microsoft Windows, Red Hat Linux and VMware.
In the last few years Rackspace has developed a cloud platform known as Mosso, which gives customers the
cost benefits and scalability of a virtualised infrastructure. It has three cloud services: CLOUD Servers, a
Linux development and deployment platform; CLOUD files, a storage and content distribution network; and CLOUD
Sites, a deployment platform for specific supported technologies such as PHP, MySQL, Python, .NET, SQL Server and IIS.
Rackspace is noted for what it calls "Fanatical Support®".
Savvis provides a wide range of hosted data centre services from co-location through to cloud offerings,
which it has had for over 4 years. Shared infrastructure services are built using Savvis's flexible service
model based on standard components. Savvis provides its services to customers across Europe and beyond, but it
has core strength in the UK. Its main data centre infrastructure is in the UK with points of presence in Europe.
It has recently built a new state-of the art facility in Slough in addition to data centres in Reading and London.
Savvis' focus is principally on the enterprise market, where it has always provided dedicated hardware services,
enabling its customers to consolidate multiple data centres into a single Savvis facility. Over the last five years
Savvis has moved more and more into the provision of shared and utility based infrastructure. It has announced two
Cloud Compute offerings, which have been modelled on its successful heritage as a utility computing
provider. "Dedicated Cloud", where servers are provided on a one-to-one basis with other
infrastructure shared and "Open Cloud", where everything is based on shared infrastructure.
Savvis' data centres in Europe are all ISO27001 accredited and SAS 70 compliant. Savvis follows ITIL®
standards and also helps some of its customers to achieve PCI compliance.
Attenda brands itself "The always on Managed Services Company". It has four data centres in the
UK and Germany, providing services targeted at the mid-market and ISVs. Attenda is part of Microsoft's incubator
program for ISVs wanting to move to a SaaS model.
Around half of Attenda's business is the provision of hosted servers on a one-to-one basis, but it also has a
sizable customer base using its shared infrastructure and is developing a cloud platform where it expects to see
the most growth in the next few years. The majority of its customers use a Microsoft based software stack.
Attenda has achieved ISO 27001, IS0 20000, ISO 90001, PRINCE2, ITIL® v2/v3 and Carbon Neutral Office compliance
for all its data centres and is working towards full PCI compliance. This all means Attenda has tight process control.
It offers a number of pricing models, including price per item of hardware, price per user, price per transaction
and/or a fixed price for agreed services over the length of a contract.
7global is a UK-based provider of managed hosting services focused almost entirely on the provision of Microsoft
infrastructure and applications, although its provision of shared infrastructure is achieved using VMware for
virtualisation. Its data centres are all fully ISO 27001 compliant.
7global believes growth will mainly come from the provision of application-level services, for example Microsoft
Dynamics CRM, SharePoint portal and Exchange email, rather than at the pure infrastructure level, although this
is currently the majority of its hosting business. 7global is an incubator partner for Microsoft
independent software vendor (ISV) programme.
For infrastructure provision, 7global provides fixed price contracts for agreed resources over a given period
of time, whilst application-level services are charged on a per user per month basis.
7.2 Type 2—systems integrators that offer managed hosting as part of a broader service offering
Some organisations that provide managed hosting services are not really interested in selling them as standalone
services, the provision being embedded in larger contracts around IT delivery. Some of the big systems integrators,
such as CSC and HP/EDS, fall into this category and are not covered in this report.
7.2.1 Atos Origin
Atos Origin is a global systems integrator that does well over 90% of its business in Europe. It is principally
focused on the enterprise segment and sees managed hosting as part of a broader services engagement. IT has 31 data
centres in Europe.
Atos has reached its current size through merger and acquisition and its data centre portfolio reflects this.
However, Atos has striven to ensure a single standard across all data centres which are all managed to ITIL® v2/v3
level to ensure what Atos calls a "continuous service delivery model" (CSDM).
Its history of serving enterprises has left Atos with a sizable mainframe customer base and 50% of its managed
hosting revenue is mainframe-based, the majority of the remainder being Windows and UNIX. Most is based on dedicated
hardware, either co-locating equipment owned by customers and managing it for them or provision of oneto- one utility
servers owned by Atos. There are plans to provide virtualised hosting on a one-to-many basis.
Traditionally Atos has had usage-based pricing but for more dynamic delivery it uses a system called
MOOD (managed operations on demand), whereby the customer pays a base price and what
they pay is adjusted each month depending on whether they have over or under used the service. Atos has recently
implemented a pay for use pricing.
Atos has a green IT initiative, called H@RMONY, for advising its customers and ensuring good management of Atos's
own IT infrastructure.
7.2.2 BT Global Services
Despite the "B" in BT standing for British, since its privatisation in the 1980's BT has expanded through
acquisition and organic growth to become a truly global operation. It has data centres in all the larger Western
European countries and parts of the Americas and Asia Pacific.
Such growth means that the degree of standardisation across its data centres varies considerably, so BT has put
in place a program it calls UNITE aimed at ensuring common standards and levels of operating efficiency. Whilst this
means services will vary from one country to the next, this will be hidden for those that engage with BT through its
virtual data centre(VDC) programme .
VDC customers have a choice of a Windows or Linux software stack, for which it charges on a per virtual machine,
per year basis with an increment for gigabytes of data stored. BT has historically provided one-to-one hardware server
hosting, including mainframes where required, but it expects high growth to come from VDC. BT sells its hosting services
direct to enterprises and to SMBs via its retail channel.
As BT owns its own network, it is a good choice for those who require a strong SLA for network performance across
multiple countries. BT claims that 42% of its data centre power supply is from renewable sources and aims to deliver
ever better environmental standards as outlined in its "Society and Environment Report" available at:
7.2.3 Cable and Wireless
Cable and Wireless (C&W) is a global telecommunication network provider that also
provides managed hosting in Europe as part of its broader data centre to desktop IT consolidation services. The majority
of its hosting business is the provision of dedicated infrastructure to large enterprises and government bodies; with the
latter there is sometimes limited sharing between related organisations.
There are some limits in its software infrastructure provision; for example only SQL Server and Oracle databases are
supported. It also offers application-specific services such as hosted Microsoft Exchange and Citrix server based
C&W data centres are managed to ITIL® level 2 and are all ISO27001 compliant. It is a Microsoft gold partner
and 80% of its deployment is Microsoft based, the remainder being Linux and UNIX.
7.2.4 Fujitsu Services
In March 2009, Fujitsu announced it was integrating its former joint venture operation with Siemens into its
own operations and, in EMEA, this means with its IT Services arm, Fujitsu Services. Whilst Fujitsu is a Japanese
company, its strength in Europe has been largely down to the acquisition of UK-headquartered ICL in 1990. This
history leaves Fujitsu with a sizeable legacy business of hosting VME-based ICL mainframes. Its historic strength
lies in providing hosting services to enterprises although it also provides services for SMBs and ISVs.
Fujitsu has 38 data centres in Europe, with locations in all the major Western Europe countries. Through these
it provides one-to-one hosting services and shared hosting service via what Fujitsu calls
IaaS (infrastructure as a service).
As it sells hardware as well as services, Fujitsu favours its own kit when customers do not have a preference
and its infrastructure is based on Fujitsu servers running a range of either Windows, Linux or UNIX based software
stacks—Fujitsu reports its business growth in all 3 areas with Microsoft being the strongest.
Its data centres are ISO270001, SAS 70 and ITIL® v2/v3 compliant. It uses a range of charging models, ranging
from per item of hardware to per transaction and unit of power consumed.
IBM provides managed hosting services as part of its systems integration arm, IBM Global Services (IGS). IGS has
11 data centres in Europe, having consolidated from over 100 in the late 1990s, improving its already respected
IBM's managed hosting services are aimed mainly at its enterprise customers, although it does serve small and
medium sized businesses but mainly through the provision of specific hosted applications servers, for example for
email and CRM.
IBM has over 90,000 servers under management, with around 70% running Windows, 25% UNIX (mainly IBM's own AIX)
and just 5% Linux.
Logica is a pan-European systems integrator, which doubled in size in 2002 by merging with the Dutch consulting
giant CMG. In 2006, it acquired WM-Data, a Nordic SI, which brought with it further infrastructure management
capabilities. Logica offers managed hosting services to its customers as part of broader systems integration
engagements. Its focus is primarily enterprise and public sector where it offers a broad range of services from
pure infrastructure provision to more application-oriented services.
Logica's long history leaves it with a legacy mainframe hosting business. It still sees some growth in demand
for hosting and managing customers' own kit and one-to-one hosting, but 50% of its managed hosting services are
now based on shared infrastructure, where it sees strong growth, and expects this to evolve into a cloud-based
offering. It charges for its hosting platform on a fixed price basis.
All data centres are ISO27001 and managed to ITIL® level 2, with level 3 training in progress. SAS 70
compliance is offered, but only where the customer demands.
7.2.7 Orange Business Services
Orange Business Services (OBS) is part of the France Telecom Group. It has data
centres in France, UK and Switzerland. On a pan-European basis its services are targeted primarily at large
enterprises, although in France it is a prominent provider to SMB and public sector customers.
Its services include both one-to-one hosting and shared infrastructure, including Microsoft, Linux and UNIX
based platforms. It reports growth in demand for Linux but says that the biggest growth area is for virtualised
infrastructure, whatever the operating system.
All its data centres are SAS 70 certified and OBS has achieved ISO27001 and ISO20000 compliance. Its global
management procedures are aligned with ITIL® v2 best practice and ITIL® v3 is under consideration. In the past
OBS has offered mainly fixed price contracts but is moving more toward per MIP or per user pricing.
T-Systems provide a wide range of hosted services as part of its broader IT services delivery focussed mainly
on enterprises. T-Systems' presence is mainly in Germany and Eastern Europe, where it focussed its main effort in
selling its hosted services. T-Systems did not provide any direct input for this report.
7.3 Type 3—internet service providers with managed hosting services
Many ISPs have developed what were initially web hosting services to offer managed hosting.
Claranet has data centres in the all the major western European countries and targets its service at businesses
of all sizes. Currently around half of its business is the provision of one-to-one managed servers, with both Windows
and Linux in equal measure, and a small number of UNIX deployments. These servers are owned and managed by Claranet
on behalf of its customers. It also provides shared infrastructure and is building a cloud platform where high growth
is expected. Claranet's data centres are all fully ITIL® v3 compliant.
Claranet charges a fixed price per server under management, be it a physical server or a virtual server or per
application instance, with additional charges based on the number of transactions and volumes of data handled
COLT provides integrated managed services that enable its customers to outsource their IT infrastructure to any
of its network of data centres across Europe. This includes server, web server, database, email and storage management.
An "Enterprise Cloud" offering is currently being rolled-out.
COLT's charging models vary depending on the type of service provided. Dedicated infrastructure deployments tend to
have a one-time set-up fee with monthly charges for the duration of the contract. Cloud services will be charged for on
a pay-as-you go basis, scaling up or down depending on customer requirement.
COLT's data centres are ISO27001 compliant and managed to ITIL® v2 level.
Easynet has 20,000 square meters of data centre space under management across all the major Western European
countries. Its hosting services are targeted at businesses of all sizes, including ISVs. Half its hosting business
is the provision of one-to-one managed servers, mainly running Windows or Linux, with some UNIX where demand is
declining in favour of Linux. Easynet also provides hosting services based on shared infrastructure. Easynet's
data centres are all ISO27001, SAS 70 and ITIL® Level 3 compliant. Easynet has built PCI-compliant applications
for customers that require it.
Easynet charges a fixed price per server under management, virtual or physical, and there are incremental
charges on top of this based on transactions and the volume of data processed. Easynet says it buys all of its
power from providers using renewable sources, for example hydro-electric in Germany, and its data centres are
in major cities, i.e.close to centre of employment.
7.3.4 Global Crossing
Global Crossing (GC) is best known for its global IP and data network services and
it is new to the managed hosting market in Europe. Much of its experience comes though the acquisition of Impsat, a
Latin American managed services provider. This means that currently GC has 15 data centres in the Americas and it
has just two in Europe, both opened in the last 9 months. GC is able to use its own global fibre network to support
broad geographic requirements of its customers, making use of other carrier's networks when necessary.
Its focus is the provision of one-to-one hosting services to enterprises, mid-market organisations, governments
and ISVs. GC is sceptical on the uptake of cloud computing and thinks that utility computing will not be via a
Standards compliance is a work in progress; ITIL® v2 is in place and v3 is being worked on, as is ISO270001.
SAS 70 audits are periodically carried out for its main data centres. GC described its pricing model as "bespoke
per customer". GC believes the monitoring and reporting it provides for its customers is a differentiator.
Hostway has four data centres in Europe and others in North America, Australia and South Korea. It provides services
for enterprises, SMBs and ISVs and is part of the IBM ‘SaaS incubation programme' and a Microsoft Service Provider
Hostway provides one-to-one hosting and shared infrastructure services and has developed a cloud computing platform.
It believes that the provision of utility computing services based on shared infrastructure sold either directly or via
SaaS-based ISVs applications is the future. Two thirds of its infrastructure is Microsoft-based where demand is
growing fastest; the rest is Linux.
Hostway is currently seeking both ISO27001 and ITIL® v3 compliance and is ISO9001 accredited. For one-to-one
hosting, Hostway generally agrees a fixed price per hardware item or by volume of data processed, but for shared
infrastructure services it is moving more to consumption based pricing—per transaction, per user, per unit of time.
7.4 Ones to watch
This final section lists some of the MHPs Quocirca spoke to which have not been included above but may be in the
next version of this report
2e2 is an IT services provider that moved into managed hosting through the acquisition of Netstore in 2008. It is
primarily focussed on the UK market, providing support across Europe through partnerships. 2e2 is a Microsoft ISV
A US-based MHP, just setting up in Europe, it has 2 brands; PEER1 itself which is a Microsoft-based shared
infrastructure platform and Server Beach which provides dedicated servers, usually Linux based.
Has 3 UK-based data centres; for its main data centre in Slough it uses a co-location provider called Equinix
which buys its power from the Slough Heat and Power Energy Centre. eLINIA reports a sharp growth in cloud-based
offerings over dedicated infrastructure and requirements for Microsoft growing faster than Linux and UNIX.
Centrinet provides a data centre facility in Lincoln, UK, which is called "Smartbunker". Its electricity
is provided by a nearby wind powered energy supplier.
OpSource is a US-based MHP that set up in Europe in 2004 and is focussed purely on the ISV market. OpSource has
recently received a $10M investment from NTT Europe Online to help expansion in Europe.
About NTT Europe Online
NTT Europe Online provides managed hosting, security and application management for dynamic enterprises internationally.
These services provide the reliability, availability, security and scalability needed to underpin business success online.
NTT Europe Online designs managed hosting solutions with the customer's business needs in mind. These solutions are
built around ITIL®, ISO20000, PRINCE2, ISO 27001 certification for information security management and best practice
As part of NTT Communications, NTT Europe Online has the global reach and scale to support businesses of all sizes.
NTT Communications is the global data and IP services arm of the Fortune Global 500 telecom leader, NipponTelegraph &
Telephone Corporation (NYSE: NTT).
NTT was ranked no. 1 among the top 10 telecom companies worldwide by Standard and Poors with a Credit Rating of
"AA". NTT also has approximately $9 billion in cash cushioning it from many of the issues created by the current
NTT Europe Online's solutions include:
- Managed Hosting in single, dual or multi-tiered infrastructures
- Managed Hosting in multiple environments (production, pre-production, development etc)
- Managed Hosting in redundant and resilient configurations
• Multi-site environments
• Application Management: management of a range of software
- Global IP Network: NTT owns and manages its Global Tier 1 Network architecture
- Business Continuity: clustering, global load balancing, built-in redundancy, mirroring, multi-site solutions,
multi-environment solutions and disaster recovery
- Virtualisation: managed virtualisation solutions for flexibly scaling solutions up and down in line with business
- Content Delivery Network: caching network manages the surges in web traffic that can lead to service disruption
- Security: range of unified threat management (UTM) services
• SaaS: infrastructure for Software as a Service in conjunction with Microsoft, Sun, Oracle and other application partners
- Data Centre Services: world class data centre services from 27 major cities globally, including eight in Europe
- User defined Service Level Agreements that cover the entire solution, not just components
Quocirca is a primary research and analysis company specialising in the business impact of
information technology and communications (ITC).With world-wide, native language reach,
Quocirca provides in-depth insights into the views of buyers and influencers in large, mid-sized and small organisations.
Its analyst team is made up of real-world practitioners with firsthand experience of ITC delivery who continuously research
and track the industry and its real usage in the markets.
Through researching perceptions, Quocirca uncovers the real hurdles to technology adoption—the personal and political
aspects of an organisation's environment and the pressures of the need for demonstrable business value in any implementation.
This capability to uncover and report back on the end-user perceptions in the market enables Quocirca to advise on the
realities of technology adoption, not the promises.
Quocirca research is always pragmatic, business orientated and conducted in the context of the bigger picture. ITC has
the ability to transform businesses and the processes that drive them, but often fails to do so. Quocirca's mission is to
help organisations improve their success rate in process enablement through better levels of understanding and the adoption
of the correct technologies at the correct time.
Quocirca has a pro-active primary research programme, regularly surveying users, purchasers and resellers of ITC
products and services on emerging, evolving and maturing technologies. Over time, Quocirca has built a picture of long
term investment trends, providing invaluable information for the whole of the ITC community.
Quocirca works with global and local providers of ITC products and services to help them deliver on the promise
that ITC holds for business. Quocirca's clients include Oracle, Microsoft, IBM, O2, T-Mobile, HP, Xerox, EMC,
Symantec and Cisco, along with other large and medium sized vendors, service providers and more specialist firms.
Details of Quocirca's work and the services it offers can be found at www.quocirca.com
This report has been written independently by Quocirca Ltd to provide an overview of the managed
The report draws on Quocirca's extensive knowledge of the technology and business arenas, and
provides advice on the approach that organisations should take to benefit from managed hosting.
like to thank NTT Europe Online for its sponsorship of this report and the NTT Europe Online customers who have
provided their time and help in the preparation of the case studies.
1 INTRODUCTION—FROM MAINFRAME BUREAUX TO CLOUD COMPUTING
2 REPORT BACKGROUND
3 WHY MANAGED HOSTING?
4 WHAT TO LOOK FOR IN AN MHP
4.1 TYPES OF MHP
4.2 MHP TARGET MARKETS
4.3 CHARGING MODELS
4.5 SERVICE LEVEL AGREEMENTS (SLA)
5 MHP INFRASTRUCTURE
6 CONCLUSIONS .
7.1 TYPE 1—PURE PLAY MHPS
7.1.1 NTT Europe Online
7.2 TYPE 2—SYSTEMS
INTEGRATORS THAT OFFER MANAGED HOSTING AS PART OF A BROADER SERVICE OFFERING
7.2.1 Atos Origin
7.2.2 BT Global Services
7.2.3 Cable and Wireless
7.2.4 Fujitsu Services
7.2.6 Logica .
7.2.7 Orange Business
7.3 TYPE 3—INTERNET SERVICE PROVIDERS WITH
MANAGED HOSTING SERVICES
7.3.4 Global Crossing
7.4 ONES TO WATCH